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Bitcoin is a disaster

• mantenpanther 6y ago
  The author has an opinion. This opinion has at least five debatable concerns. Each of them could be contradicted with good arguments. But discussing this arguments does not make much sense online, nowadays there is only pro or contra at all costs. So the market must decide.
• ancharm 6y ago
  Does bitcoin moving to a proof-of-stake algorithm change your opinion?
  • yonixw 6y ago
    What is the difference? Maybe at the start, but after rich entities will buy the most, they will only need to decide whether to buy "shares" or hardware, a random person will not have more say either way.
    • vulturalcptlst 6y ago
      I recommend looking up the pareto distribution.
  • sunshinerag 6y ago
    But bitcoin is not moving to a proof-of-stake algorithm, .. there are a lot of alt coins trying that and flailing around with that notion.
    • wyldfire 6y ago
      Several coins started off with proof of stake and aren't flailing arguably.
  • wyldfire 6y ago
    It is a good idea but doesn't address several other points of critique in this post.
• Barrin92 6y ago
  >The scarcity of block chain space has led people to re-invent every last feature of the banks they thought they were going to be escaping. This is a pretty funny point because every time I go on twitter and see people talk about crypto, what they're essentially having is a discussion about public policy, and often they seem to try to reinvent institutions that already exist without even knowing it. From market-makers, exchanges, insurance and so on, precisely as the author points out all the dreaded middlemen they were trying to avoid
  • darawk 6y ago
    This isn't a very good criticism. Lots of new things recapitulate the structures they are replacing in many ways, while improving on them in just one or a few areas. The fact that ground is being retread is not itself a criticism or a sign of a lack of innovation. Yes, Bitcoin requires many of the same structures as traditional finance. That does not make them equivalent. Traditional finance does not allow you sovereignty over your money. Bitcoin has central custody, sure. But it's opt in. That's what makes it different. You may or may not care about this property, but its undeniable that it's novel in the digital realm, and empirically many people do care about it.
    • ineedasername 6y ago
      It's not that the structures are inherently bad, it's that such structures are, philosophically, the exact sorts of things that many early (and current) proponents of crypto wanted to avoid. In that sense bitcoin hasn't failed as a system in & of itself, but it has failed to achieve the philosophical goals of those people. Bitcoin & crypto also might not be sovereign in origin but they have plenty of sovereign influence, basically as much as any sovereignty wants to impose on it. Especially as entities like the SEC & IRS come to terms with it, it will be just as vulnerable to government control as fiat currency. This is especially the case because any wide-spread adoption will require adoption by large financial institutions, which cannot avoid regulatory regimes of their local jurisdictions. From the US government's standpoint, US citizens holding bitcoins is not much different than US citizens holding Euros. How that money enters into the US economy & interacts with US financial institutions or changes hands from person to person are basically subject to the same rules & regulations. If you're conducting a a transaction in excess of $10,000 then whatever mechanism facilitates that will still be subject to CTR's, and any "suspicious" transaction of lower limits will still be reported, by law, to the government. Basically, if you want to convert bitcoin to the local currency to buy something, you'll need to use some sort of off-ramp that will be a regulatory bottleneck. Want to build a "shadow" economy purely driven by crypto exchange? Well, you'll still have to deal with the IRS knocking on your door & saying "You have things of value that you are performing work to receive. We don't care what currency or form you received them in, you received things of value. Give us our cut." In short, it doesn't matter that it wasn't created by a sovereign authority: The control a sovereign authority can exert over it is, contrary to many of the most philosophical hopes for crypto, indistinguishable from sovereign currency in everything but name & source of origin. Let me be clear though: I'm not anti-crypto. I'm probably a little ambivalent, and a little optimistic that it might replace high-friction mechanisms that exist in current financial infrastructure. What I do believe is that crypto cannot both go mainstream and fulfill the philosophical hopes that many had wanted for it.
• NosyHammock 6y ago
  >And we are learning that analysis of that record is sufficient to destroy any pretense of anonymity or pseudonymity. Fortunately we have Monero! And pretty much every other issue too he raises, Monero has it better.
  • kim0 6y ago
    Monero really is what most people thought Bitcoin was!
• ryanianian 6y ago
  I was following along until this bit which seems to hold up the entire argument: > [BTC mining] is often done using electricity which is effectively stolen from taxpayers with the help of government officials Can somebody elaborate on the stolen/corruption angle?
  • deleted 6y ago
    [deleted]
  • rtkwe 6y ago
    Not 100% sure but there was some news a few years back about miners setting up shop in towns which had really low energy costs because they bought a fixed block of power from a nearby source and thus it was super cheap... as long as they didn't have to go over that initial purchase, after that it became more expensive than normal for everyone.
    • brianobush 6y ago
      This was done in the state of Washington (Wenatchee area) due to cheap electricity from dams.
  • xt00 6y ago
    I think he's exaggerating here, but there are definitely examples where people especially in China have setup huge operations with the help of local officials who give them sweetheart deals on the electricity prices -- seems likely that the officials helping this happen may get some sort of benefit from this arrangement, but not sure if that has actually been reported or just assumed. In Washington state there were a number of bitcoin operations that started in areas with low cost power that promised to bring jobs to the area and my understanding was that the local power company often did upgrades to lines and substations to accommodate the added power needs -- the local taxpayers definitely would either pay for that capital cost or pay the additional maintenance costs down the road.
  • paulryanrogers 6y ago
    https://news.bitcoin.com/chinese-kennel-owner-caught-stealing-electricity-to-power-underground-bitcoin-mining-farm/ https://news.bitcoin.com/chinese-kennel-owner-caught-stealin... https://news.bitcoin.com/bulgarian-electricity-company-unveils-details-of-historic-power-theft-illegal-bitcoin-mining/ https://news.bitcoin.com/bulgarian-electricity-company-unvei... https://www.coindesk.com/illegal-miners-in-russia-stole-6-6m-worth-of-electricity-power-grid-firm-says https://www.coindesk.com/illegal-miners-in-russia-stole-6-6m...
• deleted 6y ago
  [deleted]
• leshokunin 6y ago
  Well this isn’t new is it? I recall chat from 2015 where people were pointing out that mining is just bad. Even when Ethereum started growing, one of the big arguments quickly became that proof of stake would be a superior approach. I agree. I think the use cases have never materialized. I do believe there’s potential in peer to peer, or at least federated approaches. Email works. Matrix works. Irc works. But I don’t think that a globally replicated ledger is the way to go. Especially with the ambition to use it as the basis for a currency that’s expected to be used for every day purchases.
  • rjurney 6y ago
    What is needed is an AI digital currency where training deep networks for representation learning has a side effect that mints coins without costing a lot of extra resources. Then mining coins is useful and we get more better AI to enslave humanity.
    • XargonEnder 6y ago
      I'm confused by how much I agree with you
      • rjurney 6y ago
        I think its a no brainer and possible doom scenario. Is it possible? There are common operations like... the L1L2 norm that are used across machine learning. Is there a way to craft an operation like a regularizer that is both useful and profitable? Or could up you use a block as an initialization parameter and somehow make use of it? A prediction task itself might work - solve this provably hard problem and you own the cash. I don’t know but it seems like what is needed.
        • abrichr 6y ago
          There is some work in this area: https://sentient.org/ https://sentient.org/ https://arxiv.org/abs/1903.09800 https://arxiv.org/abs/1903.09800 https://www.researchgate.net/profile/Andrea_Merlina2/publication/337586007_BlockML_a_useful_proof_of_work_system_based_on_machine_learning_tasks/links/5e03b2de299bf10bc379616b/BlockML-a-useful-proof-of-work-system-based-on-machine-learning-tasks.pdf https://www.researchgate.net/profile/Andrea_Merlina2/publica... https://arxiv.org/abs/2001.09244 https://arxiv.org/abs/2001.09244 https://link.springer.com/chapter/10.1007%2F978-3-030-59595-1_4 https://link.springer.com/chapter/10.1007%2F978-3-030-59595-...
• sunshinerag 6y ago
  I have no idea what he is talking about. I use bitcoin to buy things both onchain and via lightning and the experience is so smooth and much much better than the circa 2017 period when fees were high. Don't keep it on exchange. The real thing that is stopping adoption is countries trying to classify it as a commodity and insist to pay capital gains on every microtransaction. Some countries are backwards (US, UK) than the others. Germany and few other countries are forward looking. No VAT on bitcoin transactions and no CGT if held for a year.
  • Triv888 6y ago
    They want the USD to stay king of currencies...
    • ashtonkem 6y ago
      Yeah, that is explicit US policy, and implicitly supported by most other nations that have significant debts and reserves denominated in USD.
  • etimberg 6y ago
    Why do you believe there should be no capital gains on it?
    • risho 6y ago
      because you can't use it as a money if you need to pay capital gains on every stick of gum you buy. they should find other ways to collect taxes that doesn't inhibit it.
      • etimberg 6y ago
        If you held any other foreign currency you would have to track it like this. For example, I live in Canada and if I bought USD and then spent it over the course of a year in Canada I would be responsible for the capital gain tracked on each expenditure based on the day's exchange rate. It's hard to see how Bitcoin should be any different.
• sMarsIntruder 6y ago
  That's a nope.
• jokethrowaway 6y ago
  Completely agreeable, albeit it misses a point: Governments can't print more of it. That's it really, everything else is noise. I can sympathize with btc (I wish we still had a gold standard, or a standard based on the price of common goods) but I don't see much the other benefits. On top of this, governments could ban btc.
  • raziel2701 6y ago
    I mean, the 21 million cap is just a line of code no? No reason why if enough people agree to it they could just print more. Or they could fork and print more no? I find it strange that people speak of bitcoin's scarcity as if it were a physical thing.
    • ve55 6y ago
      Getting most people to agree to such a fork is likely impossible
      • mindcandy 6y ago
        Agreed. There have been 21 million forks of Bitcoin with all manner of modifications. You don't hear about them because practically no one agrees with them enough to mine/trade/use them. You could make your own fork in an afternoon. The hard part is convincing anyone else to care.
      • guidovranken 6y ago
        It has happened before. Ethereum Classic is the "original" version of Ethereum, but it's a nondescript altcoin, while the one that reversed transactions is the number #2 in the world. I don't see why that can't happen to Bitcoin if the network participants (ideally normal users but practically the miners) and major stakeholders can benefit from it.
        • scotty79 6y ago
          They won't benefit because that will tank the price like nothing else.
• rmason 6y ago
  I was real excited the first time that Bitcoin was explained to me. I saw it as the first real alternative to paper money. But what I soon learned is that most of the people associated with Bitcoin saw it as digital gold and were only interested in seeing the value rise and cashing out. I've seen a few positive developments every once in a while that fail to get much adoption. So I keep waiting and waiting. It increasingly looks to me like whatever solution eventually wins will be built upon the existing banking system ;<(.
  • SoSoRoCoCo 6y ago
    Same here. I thought it sounded great because I have zero knowledge of monetary policy, which has been at it in modern form since Isaac Newton. So naturally I thought it was a godsend. Truth is: financial institutions aren't just something a few hackers can whip up in a decade. The mill-billionaire bitcoin hackers were in the right place at the right time for lightening to strike. I think like ADAS/SDV, cryptocurrency has a looooong way to go.
  • Finnucane 6y ago
    > "But what I soon learned is that most of the people associated with Bitcoin saw it as digital gold " Since it was basically designed to work like a pseudo-physical commodity, and most of the rhetoric to support its existence is warmed-over goldbuggery, why should this be surprising?
    • konjin 6y ago
      Because you could easily tweak the algorithms to make it act like stockpiling cheese. If you use a value time pair adding inflation that reduces the value of old coins is trivial.
    • ineedasername 6y ago
      Gold seems like it was always an odd thing to pin an economy to to begin with. A resource that isn't inherently tied to value that seems to have been "chosen" by centuries of evolution towards a scarce material that could be centrally controlled. What's more, it has become less scarce as better technologies have emerged for extracting it. And just like printing excess fiat currency, early gold rushes showed the same type of rapid inflation in local economies, with money made by those selling mining tools & services to miners, and those purchasing the mined gold to arbitrage it out to other geographical regions. It was still just an abstraction layer put on top of direct bartering to solve the liquidity problems inherent to direct bartering once the # of goods and services reach a high enough level. The fundamental principal of economics that many people miss when they focus mainly on monetary supply is that the velocity of capital [0] is of equal or perhaps even greater importance. [0] https://www.aier.org/article/what-is-money-velocity-and-why-does-it-matter/ https://www.aier.org/article/what-is-money-velocity-and-why-...
• MBCook 6y ago
  Very well written. How I wish this would be heeded. Instead I fear we’ll be stuck with BTC and its clones for many more years.
• theodric 6y ago
  "Disaster" is a funny way to spell "I didn't buy in early and now I'm bitter, hurr durr Dunning-Krugerrands"
  • lawtalkinghuman 6y ago
    The trollish Bitcoiner answer to every criticism: "you just jelly of my internet money".
    • jokethrowaway 6y ago
      I definitely am! I can't believe btc got this far. I never bought anything because it sounds ridiculous and the kind of thing any western government would ban immediately - turns out I was wrong. I know people who are completely clueless about the economy who retired just by betting on BTC.
    • Greed 6y ago
      The difficulty in criticizing Bitcoin and what it could have been is that everyone willing to engage you on it is quite literally invested in being right. Zealots betting the house can't afford to be wrong because it would often make them bankrupt.
  • altdatathrow 6y ago
    The author of the post, Ray Dillinger <bear@sonic.net>, was involved in the bitcoin project alongside Satoshi at the very beginning: http://diswww.mit.edu/bloom-picayune/crypto/137799 http://diswww.mit.edu/bloom-picayune/crypto/137799 He's among a very small group of original authors. He quite literally bought into Bitcoin when it was just an idea.
    • XW013K6 6y ago
      Bought in and unfortunately sold out @ $1/BTC. At $30K/BTC it's a life of regrets left to live.
  • dang 6y ago
    Please don't break the site guidelines like this. For example, these: "Don't be snarky." "Please don't post shallow dismissals, especially of other people's work. A good critical comment teaches us something." https://news.ycombinator.com/newsguidelines.html https://news.ycombinator.com/newsguidelines.html
• tryptophan 6y ago
  > The pseudonymity of coins being owned by the bearer of some > cryptographic key is a failure; People have been eavesdropping and > aggressively analyzing the block chain from day 1. And the block chain > will always be there, it will always be public, and it will always be > subject to further analysis. And we are learning that analysis of that > record is sufficient to destroy any pretense of anonymity or > pseudonymity. Yeah, privacy is a joke on blockchains. Perhaps that is why actually private coins like Monero are having such 'difficulty' getting adoption on mainstream platforms, with shitcoins getting preference. I suspect that if coinbase tried to add Monero, they would get a very angry letter from the CIA/FBI (perhaps this already happened, they have been having 'technical difficulties' adding it for years now).
  • 37ef_ced3 6y ago
    I wonder how many Bitcoin users have read and understand the following extensive list of privacy "pitfalls" (mistakes that can reveal information about unwary Bitcoin users): https://en.bitcoin.it/wiki/Privacy https://en.bitcoin.it/wiki/Privacy Are you careful to avoid these numerous privacy pitfalls? If not, you're leaking information about yourself, into the public ledger (blockchain)
    • Trasmatta 6y ago
      It makes me wonder how many people have gotten busted for either buying or selling drugs with cryptocurrencies, thinking it was automatically safe and private.
      • ineedasername 6y ago
        It's simply an extra layer & bit of effort law enforcement has to jump through, and as understanding of crypto permeates society & law enforcement, even those barriers will be removed.
    • XargonEnder 6y ago
      Wow that's a ludacris list of pitfalls. I've overwhelmed just looking at the list of sections in that document.
• deleted 6y ago
  [deleted]
• keithwhor 6y ago
  Related: the current rise of Bitcoin prices has been peculiar to me, and seems to be a bit of a canary in an inflationary coal mine. We've injected trillions of dollars of fiat into the economy this year. It feels like the sky-high valuations of technology companies and Bitcoin are "shock absorbers" of sorts, or early signals of inflation-yet-to-come. If we assume the market is efficiently pricing these assets (like AirBnB's IPO) then it could very well be that the actual value of a fiat dollar has dropped dramatically -- making sky-high valuations more reasonable -- and we'll only see that reflected in the price of consumer goods and commodities once industry leaders collectively feel comfortable the economy is on track again. After all, you can only charge what consumers can afford to pay. I'm an armchair economist at best. I just can't make sense of the market right now, and wouldn't be surprised to see the price of things like groceries, beer and travel double or triple what they were in 2019. Is there anybody writing about this that I haven't been paying attention to? Am I missing something?
  • ant6n 6y ago
    But then what would one invest in? The stock market may just as easily crash.
    • brokencode 6y ago
      But a stock represents ownership of a real company that (hopefully) will make profits that can be distributed as a dividend or be used to grow the company and increase the value. A Bitcoin is totally speculative and has virtually no useful purpose in the real world yet. You can’t actually buy stuff with it from stores, due to its niche status, high fees, slow transactions, and wild price fluctuations. Looking at it that way, it’s clear that a stock is a much safer investment than a Bitcoin.
      • smabie 6y ago
        It doesn't matter how safe an investment is. Uncorrelated alternative assets (metals, crypto, art, etc), when added to your portfolio, lower the total volatility (risk) and boost the risk adjusted returns. You can take a really crappy asset with low returns and high volatility (like gold) and add it to your portfolio to boost your risk adjusted return. In short, from a quantitative perspective, it never makes sense to look at a security or asset in isolation. Instead one must consider the total portfolio as a whole. Source: work as a quant trader tldr: If the question is "does crypto have a place in everyone's portfolio?" The answer is emphatic an "yes". And indeed, we are quickly moving towards a world in which crypto is held by most institutional investors. Even at this early stage, the institutional flows into btc is staggering. And it will only increase with time. From my vantage point as an insider, btc is here to stay. full stop
• ddevault 6y ago
  On the other hand, the existince of a cryptocurrency ecosystem has given us a really easy and clear indicator that a company or individual is lacking in scruples, and that we should move on from whatever they're hawking.
• baby 6y ago
  That’s nonsense. Bitcoin is as good a store of value as gold due to one unique feature: scarcity. Actually, it’s even less power consuming than the gold industry and is much more transparent. I wouldn’t really advise bitcoin for anything else, like day to day transactions, although I and many of my friends have used bitcoin to transact on dark markets and it works. The only argument I’ve heard about gold being better than bitcoin is that you can do something with gold. That’s horse in my opinion. Gold is good for nothing useful imo, but is used in jewlery and other because it has value (not the other way around, as in gold has value because people make jewelry with it).
  • oblio 6y ago
    > Gold is good for nothing useful imo, but is used in jewlery and other because it has value (not the other way around, as in gold has value because people make jewelry with it). You do know that gold has super low reactivity and it's a very good conductor, right? :-)
    • baby 6y ago
      How often is it used for that use case? Does gold have a high value due to this? No. I would even say that we might see more use industrially if people weren’t inflating its price by using it as a store of value.
      • TheAnswerMan 6y ago
        > How often is it used for that use case? 100% of all cases. You just used gold to ask that question.
        • smabie 6y ago
          Most gold is not used for industrial purposes
      • tokai 6y ago
        37% of gold use in the US is for electronics. https://geology.com/minerals/gold/uses-of-gold.shtml https://geology.com/minerals/gold/uses-of-gold.shtml
• papito 6y ago
  From what I understand, the availability of coin that can be "mined" halves every year (?), so at some point there will be essentially no new coin. What you have is what you have out there. It will just keep going up in price to include all the accumulating "worth". That should be fun to watch. In addition, just yesterday the headline flashed in front of me, Marketwatch: "After recent price spike, bitcoin requires enough power for a country of more than 200 million people".
• gojomo 6y ago
  Sure, but it's a beautiful disaster that's helped explore the space, & both train & incentivize people for various offshoots & successors that will resolve all of Dillinger's concerns, and more.
• seibelj 6y ago
  Bitcoin doesn’t care about these articles. Ignore it if you want - many people do. Bitcoin gives the choice to opt of the current financial system. No problem if you don’t, it’s completely voluntarily.
• tempsy 6y ago
  the biggest difference between this rally and 2017 is that it appears to be mostly just bitcoin and, to a smaller extent, eth, and seems largely driven by institutions who now feel it is finally investable. imo there isn’t quite the same level of excitement even though the price is much higher now. just feels like another asset Wall Street is accumulating.
• jancsika 6y ago
  > Hal shipped the prototype because he had just been told he had a terminal illness. That's from Phillip Hallam-Baker. Is there evidence Hal was Satoshi, or is this just more speculation? Or am I misunderstanding his response?
  • garmaine 6y ago
    Hal is not satoshi. This is baseless speculation which puts Hal’s family at risk.
• louwrentius 6y ago
  This is written from the perspective of a person who believes in blockchain-based currencies but thinks Bitcoin as an implementation of said currency is a failure. He thinks the concept of mining is a fundamental flaw. But he keeps the door open for different implementations. Personally, I think the whole concept of blockchain-based currencies is flawed. But let’s not go there right now. The value of Bitcoin is very high and that’s very scary. Who is buying? All those investors who have no place else to go? Gambling on Bitcoin to find ‘growth’? Bitcoin is quickly becoming too big to fail. But it will fail at some point, because I believe it isn’t anything. (You may disagree, but hear me out). So when the music stops, I think it could be the event that triggers another 2007/2008. Bot big enough by itself. But it triggers the same avalanche of bankruptcies, the dominos will fall. This time though, all financial instruments to save us are exhausted. Interest is zero. The worst may yet to come.
  • baby 6y ago
    Why would you put your money in gold rather than bitcoin? Also why is the concept of blockchain as currency is flawed? What construction would you use instead for a currency that is trusted throughout the world?
    • louwrentius 6y ago
      I think the problems we face are not solved by technology but through policy. It may never be solved, but I believe no crypto currency will ever solve an inate human trust problem.
  • MBCook 6y ago
    I agree that it’s inherently flawed, however I don’t see how it would be big enough to trigger another 2008. That seems way out of proportion to me. I think bitcoins affect on the real economy is just too small.
  • carlineng 6y ago
    Bitcoin total market cap is ~$500 billion, so it's still a pretty small niche, and I think there's quite a ways to go before it becomes "too big to fail". For comparison, the market cap of gold is ~$10 trillion. The majority of the US economy is not hooked into Bitcoin, and very few institutional investors have any significant exposure to Bitcoin. Contrast that with the '08 financial crisis that was based in real estate -- the US real estate market at the peak of the crisis was ~$23 trillion [1], with nearly every major financial institution heavily exposed. [1]: https://www.federalreserve.gov/releases/z1/dataviz/z1/balance_sheet/chart/#series:nonfinancial-assets https://www.federalreserve.gov/releases/z1/dataviz/z1/balanc...
• svara 6y ago
  There does seem to be a fundamental design issue in bitcoin and proof of work in general: Mining has economies of scale and therefore winner takes all mechanics leading to centralization. At that point the mechanism that ensures ledger integrity is the calculation that if the miner tampers with the ledger, that would destroy trust in the coin and hurt the miner in that way. But 1) that's exactly how conventional currencies work too and 2) it's actually an untested hypothesis. Who knows what would happen in a world where the economy runs on bitcoin and there's some "good reason" to deviate from the protocol.
  • sunshinerag 6y ago
    Re: 1, I don't see conventional currencies working that way. Has any government promised how and why they will maintain their currency. They supposedly claim they help people why screwing up the very same people. Case in point, the 2008 crisis and the various modern monetary based crises.
    • ineedasername 6y ago
      I agree that governments can manipulate their monetary policy in ways that are not in the best interests of their people. But I also don't see how widespread crypto currency would 1) have prevented the '08/'09 financial collapse, and 2) it appears that fiat monetary policy has more flexibility in responding to such crisis by inserting liquidity, facilitating the controlled dissolution of defunct financial institutions, etc.
    • xapata 6y ago
      2008 is a great example of why fiat currency is helpful. The government can simply create more to stimulate cash flow and/or prevent a crisis of confidence in a non-government institution.
      • dleslie 6y ago
        Twelve years later and I'm still waiting on that severe/total economic collapse wrought of quantitative easing that the libertarian hawks envisaged.
• rhacker 6y ago
  The entire point of some of the alt-coins was to address all these complaints. So instead of piling onto Bitcoin which is years of stuff we already know about, focus on those alt-coins that support the ideas you want in a cryptocurrency.
  • xarthna 6y ago
    I've been reading about the tech behind bitcoin and I find it interesting yet have been skeptical due to some perceived flaws. I've been concerned about the market externality due to the amount of energy it takes to mine blocks. What are some alt coins worth exploring?
• Traster 6y ago
  It really hadn't hit home to me that yes, BTC is being mined using ASICS by a handful of players, probably operating out of various authoritarian regimes. We've got the US getting all angry because TikTok is a Chinese country, and yet we've oestensibly got libertarians telling us to move out money into a currency controlled by Chinese BTC miners. It'd be fascinating if China could cause a recession in the west by taking down bitcoin overnight.
  • geofft 6y ago
    That's not even the real danger. The real danger is that by controlling 51% of the network, authoritarian regimes can block transactions by people they don't like or cause people to accept money that turns out not to exist.
    • Traster 6y ago
      I think the point is that any of these style of attacks are quickly discoverable and immediately destroy the value of all bitcoins.
      • geofft 6y ago
        It depends on the target. If some rich, nontechnical bitcoin hodler announced "I can't spend my money because the government is censoring my transactions," do you think the response would be a community investigation (which would risk all the investigators' bitcoins losing their value) or deriding the complainer as a conspiracy theorist who doesn't get how Bitcoin's design makes censorship impossible?
• jger15 6y ago
  hmm...think this misses the point. bitcoin is a store of value against inflation
• julius_set 6y ago
  I see a lot of biased posts on Hacker news regarding Bitcoin. How it will replace fiat, how it will revolutionize banking, how it will continue to go up in price. The fact is that the technology powering Bitcoin is not great. There are better alternatives to Bitcoin, transactions still take a long time to finish on Bitcoin. And the alternatives themselves need to be refined too. There are also still a lot of scam coins in play, I personally know a few founders (no relation and no business doing work with them), where they admitted to me their coin was a scam in them getting rich. So I’m skeptical, very very skeptical. These “friends” got rich off poor chaps looking to make a quick buck. I am almost envious, then I remember that the feds or IRS or some other institution will come after then at some point. One of them is paying off their current user base because they got hacked.
  • vulturalcptlst 6y ago
    You're missing the entire importance of balance. Unfortunately, I'm not sure you understand what makes Bitcoin valuable. It's a balance between: Decentralization, Security, and Speed of Transaction but still doesn't compromised on the other two. Bitcoin is balanced with immaculate conception. There's no 'altcoin' that will be able to achieve this.
  • josalhor 6y ago
    There has been some work being done by the EU to make a digital euro [0]. China [1] and the US [2] are also exploring digital alternatives. I believe if these alternatives are well implemented they are going to change banking forever. Banks could become a frontend to that digital infrastructure that would only add features to the network (safety, insurance, help keep your transactions anonymous...). Naturally, everything that I am saying is 100% speculation, but I don't see a world where the current digital currencies (Bitcoin et al.) get backed by the governments. [0]: https://www.ecb.europa.eu/press/pr/date/2020/html/ecb.pr201002~f90bfc94a8.en.html https://www.ecb.europa.eu/press/pr/date/2020/html/ecb.pr2010... [1]: https://www.wsj.com/articles/china-to-expand-testing-of-a-digital-currency-11597385324 https://www.wsj.com/articles/china-to-expand-testing-of-a-di... [2]: https://www.forbes.com/sites/billybambrough/2020/08/22/digital-dollar-could-compete-with-bitcoin/ https://www.forbes.com/sites/billybambrough/2020/08/22/digit...
• ionwake 6y ago
  sounds salty
• mind_half_full 6y ago
  Huh? - It's easy enough to store bitcoin on a hardware wallet and not use an exchange. - As the world pivots to solar and EV's electricity becomes much less of an issue over time. - There are significant technological breakthroughs (e.g. Eth 2.0) coming every day in the way of scaling blockchains.
• 11235813213455 6y ago
  A huge energy cost most of all https://www.bbc.com/news/technology-48853230 https://www.bbc.com/news/technology-48853230, so environmental damages (maintenance of those machines, and all hidden pollution behind just the pure electricity consumption)
• geofft 6y ago
  Here's the hard question: is it not a moral imperative, now, to stop Bitcoin (and other related proof-of-work systems) before they destroy the planet further? How do we do it?
  • mitch3x3 6y ago
    How are they destroying the planet?
• XW013K6 6y ago
  When 7.6B people around the world crave 21M of a super-scarce resource that no government can deflate we'll get to $1M+/BTC. Those that continue to dis BTC are invariably those that do not own "enough". $600 checks on top of $1200 checks and maybe $2000 checks soon. This is devaluation. Add to this corrupt FDA/Fauci and approvals for BS (Remdeathisvir and Conv-plasma) drugs that do not work, while holding back live-saving MABs (like Leronlimab) that have an outstanding chance of saving 10Ks of lives. The virus is the trigger for BTC to keep your savings in. Anything else is sheer foolishness. Think Caracalla.
• XW013K6 6y ago
  The author is Ray Dillinger, who has an axe to grind, having been involved with BTC since early days, and losing out hugely.
  • vulturalcptlst 6y ago
    I appreciate the context.
  • reactspa 6y ago
    > losing out hugely Would like to learn more about this. Thanks.
• JoshTko 6y ago
  Anyone know if any bitcoin exchanges definitively have a fractional reserve of bitcoin? Seems to be that would be a recipe for bankruptcy given the volatility.
• Bakary 6y ago
  From my POV the ideological reason behind supporting bitcoin is somewhat weakened given that you'll just have the caste of early adopters completely dominate the market. Essentially trading one elite with another with possibly even greater inequality this time
  • stjohnswarts 6y ago
    I think this is why it will fail but some other cc will rise that actually has the characteristics of the original intent of bitcoin.
• spottybanana 6y ago
  If you think Bitcoin is bad, don't use it. Bitcoin is free market protocol. Often in free market it comes down to preferences, and this kind of opinion pieces are just a statement that I don't like what other people don't like, and other people shouldn't like what they like.
  • mden 6y ago
    This type of mentality stunts discussion and equally applies to your comment as well as the post. If you truly believed in what you wrote you would simply ignore an opinion piece that you didn't like instead of commenting on it.
  • progval 6y ago
    Bitcoin is also bad for you even if you don't use it. Greenhouse gas emission affects everyone, for example. So it makes sense to try to convince others to stop using it as well.
    • chii 6y ago
      regarding emissions - there needs to be a carbon tax for energy. that will solve this externality pretty well imho.
    • Siira 6y ago
      So is every other animal activity, e.g., dancing.
• LaserHodl 6y ago
  To all the software engineers who have dismissed Bitcoin for over a decade: Have Fun Staying Poor.
• x87678r 6y ago
  BTC is so pointless to me. The problem is it keeps going up. It looks like its more likely to hit $100,000 before $0, so you can still make a lot of money by buying now. Which is why I bought some.
• ashtonkem 6y ago
  What's kind of amazing is that all of this has been obvious for years, and yet we're still talking about the same flaws and promises of bitcoin.
• api 6y ago
  Bitcoin is a very interesting piece of technology that has become a bubble due to a combination of historically low interest rates (and QE, and other forms of actual money printing) combined with a scarcity of good investments. Without the forces transforming it into a bubble, Bitcoin and other cryptocurrencies would be interesting technologies used by enthusiasts, as an international wire transfer method, and for some black and grey market commerce. They wouldn't be anywhere near as insane as they are. These same forces are causing the stock market and real estate to go apeshit in the middle of a pandemic-driven massive recession, which is in some ways even more insane than Bitcoin. We are in a chronically demand-constrained economy. Until we actually recapitalize the consumer, nothing will change. We'll continue to print money forever in an attempt to revitalize the economy, and all it will do is inflate more bubbles and probably even nuttier ones.
  • vulturalcptlst 6y ago
    Each bubble has popped and maitinted a price higher than last.
• frankydp 6y ago
  Consumers want safety(fraud/transaction protection) not anonymity. Currently the largest and most motivated group of users that want transaction anonymity are those that want to deliberately circumvent tracking for gain. Credit cards solved the digital currency problem decades ago. The anonymity feature argument was always going to fall on deaf ears with consumers.
• nathias 6y ago
  Yes the public nature of transactions is a feature. Yes the scarcity is a feature (remember this in 5 years when hyperinflation hits you). And the point of making money fair isn't to reinvent its features its to make them transparent and equal to all without catering to the special parasitic aspects of our societies.
• stevefrench93 6y ago
  Bitcoin is more accurately referred to as Bitcoin Core. The philosophical successor to the original Bitcoin is Bitcoin Cash. You can see the difference for yourself here: https://bitcoinfees.cash/ https://bitcoinfees.cash/ Bitcoin, at least according to Satoshi's original white paper, is supposed to be a peer to peer electronic cash system. Let's pay for a Bay Area cup of coffee with Bitcoin. That'll be $13 ($5 + $8 in network fees). If we use Bitcoin Cash, its $5. As you can see, Bitcoin is no longer useful. That's because Bitcoin Cash is Bitcoin, and Bitcoin is...well, something else. Like all nice ideas that happen to rock the boat, Bitcoin was subverted, controlled, and is no longer Bitcoin, but that's a story for another day.
  • vulturalcptlst 6y ago
    I'm sorry for your loss and inability to learn. I don't know how many times people will just choose to not look at how block size increase is a throughout increase and nothing to do with scaling. Literally, it will do 'jack' to raise it to 8mb.. I’d love to see the Bcash network with our volume but it will never happen because it’s a joke and a clear sign that the devs aren’t CS centric for Bcash. You've been hoodwinked to sign up to a centralized coin that can be changed whenever necessary. When will the increase stop? 10MB? 100MB? No more like 300-1000MB every 10 min. So the bloat to the blockchain for having visa level tps(2000-56,000+ tps) would be so massive there would be no full nodes to run the blockchain except for big players willing to add like 300MB every 10 min...centralizing the network to its death with the enormous packs of data. This is a poor design decision because it WILL get FILLED almost instantly. Increasing the block size pulls the voting power out from the knowledgeable user in that it makes it near impossible for them to run a node (would be 20k to run a node if MB is increased too drastically) and 'vote' with what software they want for the protocol. If there are only companies running the nodes then they will determine what get's upgraded within the code, so, for example, they could raise the 21 million limit. It's obvious we need second layer solutions like lightning network( which needs segwit to run well). There is no way in a million years it'll scale onchain. Bitcoin will work without 2nd layer solutions, but the 'cash' component will come with that adoption. Let me explain why fees are important The network involves an intrinsically scarce resource which is block space. This resource is intrinsically scarce in the same way that a boat has a load capacity. Go beyond that load capacity and the boat sinks. Likewise, go beyond a certain amount of data in the blockchain and the network sinks by losing its decentralization which is what gives it its security. Consequently, the amount of data that can be processed must remain limited and therefore users must compete over who gets to actually input data into the blockchain. Users compete by essentially paying the miners a bribe, which we call a "fee." It is worth noting that in the very early days when bitcoin was unpopular, transactions were free. And transactions would still be free if there weren't so many people trying to get through the door at once. Miners are like bouncers who have to decide who to let in first. Naturally, the best way to get the bouncer to let you in first is to pay him, and that's what we are doing when we pay transaction fees. If fees were based on a fixed percentage, low value transactions with correspondingly low fees would never get confirmed because miners would always favor the higher value transactions with their juicier fees. The blockchain is not designed for cheap low value transactions, it intrinsically favors high value transactions. This is because for high value transactions, the percentage the fee represents is small, whereas for low value transactions the fee quickly becomes a large percentage of the value of the transaction. That is, for high value transactions, fees are cheap, percentage wise. For low value transactions, on the other hand, they are expensive. So it is important to understand that the blockchain is a value transfer layer, and as a value transfer layer it is by its nature designed to favor high value transfers over low value transfers. The more payment networks come to be relied upon for small value transactions -- and the more people use them as opposed to trying to get every transaction into the blockchain directly -- the less people are fighting over the scarce resource known as block space, consequently the cheaper block space becomes. That is, payment networks not only offer a cheap way to transact for low value payments, but they also reduce the costs of high value transactions on the blockchain itself. Roger Ver's confusion -- along with many who agree with him -- is that he thinks of the blockchain as an efficient payment network. It's not. Just look at the electricity expenses that are going into making transactions on the blockchain possible. Right now the network is consuming as much energy as the country Ireland? All that energy is not being spent on making transactions cheap or fast -- additional mining power has a negligible affect on the speed of bitcoin as the protocol always seeks to maintain 10 minute confirmation times, and additional mining power has a negligible affect on the price of fees as that is determined most principally by the fact that there is a limited supply of block space. No. That energy is being spent entirely on securing the network. The blockchain is about security first, not cheap payments. Cheap payments will come with Lightning and other such payment networks, but the purpose of the blockchain is first and foremost about securing a global public ledger. What you want is the security layer to be secure, and the payment layer to be fast and cheap. The two combined (along with so much more) is what will eventually be considered Bitcoin (much like people ceased to differentiate the internet from the web). What you don't want is to try to use the security layer as the payment network so that it isn't secure. And since the blockchain, the security layer as it were, isn't particularly fast or cheap, any network that attempts to use the blockchain as a payment network to compete with networks specifically designed to be payment networks, like Lightning, will in the long run fail.
• djmetzle 6y ago
  https://youtu.be/uT17W8CmX4g https://youtu.be/uT17W8CmX4g
• templarchamp 6y ago
  Bitcoins are digital-hawalas and therefore are keepsakes. You can find yourself or pay to get someone's keepsakes. There is no counter-party, just like gold and oil. Once I own it, there is no way to consume it other than to barter it. It could be made illegal anytime by authorities.
  • bitxbitxbitcoin 6y ago
    I also like the digital-hawala analogy for explaining bitcoin's value. The fact that it could be declared illegal by fiat doesn't completely remove its usefulness because at the end of the day it's open source software.
  • sn_master 6y ago
    Fentanyl, Meth, Shrooms, Credit Reports, child abuse videos, guns and gun parts, credit reports, scamming the elderly out of their lifesavings with BTC ATMs and strong arming hospitals into paying tens of millions with ransomware during the pandemic are "keepsakes"? Please fix your time machine and join us in 2021, Its awesome in here!
• barrynevio 6y ago
  Checkout the first sentence of the REAMDE https://github.com/bitcoin/bitcoin/blob/master/README.md https://github.com/bitcoin/bitcoin/blob/master/README.md Bitcoin is an experimental digital currency The keyword being "experimental"
• cambalache 6y ago
  I agree with most of the points raised by the author but as a Venezuelan Bitcoin is a godsend. If you live abroad and want to send remittances to your friends and family it can be pretty easy in a normal country , with wire transfers,western union and so on. If your family lives in Venezuela your options are extremely more limited. These are some of the options Venezuelans have had to use: 1. Ask the money to be sent to Colombia with WU and then travel hundreds of kms to get what usually amounts to a few hundred dollars at most. 2. Use Zelle, send dollars in the US, and receive Bolivares in Venezuela. But for that you need to have an US bank account, and find a person you can trust also with an US bank account and plenty of highly volatile Bolivares in Venezuela willing to make the exchange. 3. Use paypal, same as above with way higher commissions and the risk that paypal (and the other person) will fuck you. 4. Buy Amazon gift cards and use the same schema above, be exposed to scams and high commisions fees. Trading bitcoins in say localbitcoins.com, you have a very liquid market and somewhat secure transactions (Bitcoins are not liberated until you check the money is in the Venezuela account). There are risks of course, especially because of BTC volatility but at least is a fast,convenient,widespread option. I wish something like that, only more stable and with less of that Tulip-craze whiff BTC has.
  • ur-whale 6y ago
    >western union if you don't mind the usury-level fees
    • arcticbull 6y ago
      Their fees are surprisingly competitive, take another look. In places where fees are high it usually has to do with risks of doing business in the locale that they have to price in.
    • olcor 6y ago
      Western Union had, hands-down, the best rates and the least hassle for me sending money to my home country. The old reputation of WU just doesn't hold ground any more.
  • wpietri 6y ago
• tomphoolery 6y ago
  I think the biggest failure of Bitcoin is that it was marketed as a "currency" and ended up becoming a commodity. Bitcoin isn't something you use to spend wealth, it's used to hold wealth. Unlike a stock, however, whose value is based on what price people are willing to pay for it, Bitcoin's value is determined by its scarcity. Sound familiar? That's why I hate the term "cryptocurrency". It has a lie baked right into it, the fact that this is supposed to be a "currency", when in reality it's just the same kind of digital assets that dominate all forms of entertainment these days. If the term you're using to refer to your product is itself a lie, what does that say for the rest of the product? The organization creating it? Crypto, overall, is just hard to trust.
  • bitxbitxbitcoin 6y ago
    The thing is, for the vast majority of civilized human history, currencies have been commodities. Cryptocommodity does have a nice ring to it, though.
    • chii 6y ago
      cryptogold?
    • tradertef 6y ago
      +1 for Cryptocommodity
  • d0gbread 6y ago
    This is a similar argument to the semantics of black lives matter and refund the police. Sure, maybe there's a better name to make a better first impression, maybe not. Move past it. Ironically you already have by simply referring to it as "crypto" as most do. Things evolve, like "e-mail" becoming "email" and countless other evolutions as things find their niche and become mainstream.
  • graeme 6y ago
    > Unlike a stock, however, whose value is based on what price people are willing to pay for it This isn’t quite right. Stocks have value because they represent ownership. The price is based on the perceived value, not the other way around. But even if no one was willing to buy apple shares, say, they would still have immense value. Shareholders are entitled to the profits. This is not true of bitcoin, which has no intrinsic value outside of what people are willing to pay for it. Warren Buffett made this point in an argument against gold investing. If you were an investor in 1900 you would expect stock investments to be worth more in 2000, and for gold not to be, because stocks have productive value and gold doesn’t. And that’s more or less what happened.
• rkagerer 6y ago
  I bought my smartphone from Hong Kong, in part because I wanted a specific variant that would be more likely to work with open-source ROM's. The seller initially requested payment via Transferwise, who sought crazy amounts of personal information and bullied me into a privacy-hostile customer agreement. Days went by and they still hadn't activated my account. Growing frustrated, I convinced the seller to accept Bitcoin, which was comparatively instant. The phone arrived a few days later, meanwhile the Transferwise morons still had their heads up their arses with no movement and no good explanation. I'm not a financial risk; I'm a good little citizen with no red flags. Reading between the lines my sense was their staff were overloaded or their onboarding system was simply broken. Bitcoin was incredibly helpful for me that day, and my favorite feature about the phone is the way I paid. In addition to a great story, I've got to admit there was something liberating and empowering about giving what felt like a big middle finger to the slow, decrepit, old-fashioned institution who couldn't even deliver on their core business proposition. Like saying "screw you, I don't need you and your crappy service anymore, come back when you can compete on merits". Whatever else you criticize about Bitcoin, it's still "cash you can email", and even if that's all it ever amounts to I still find it a bloody useful innovation.
  • bob33212 6y ago
    Western Union is also very useful, but the vast majority of transactions are not made by Western Union because it has tradeoffs that make other things like credit/debit cards and checks a better option. Bitcoin Evangelists are trying to pump up the price by advocating that bitcoin will be the best method of making payments for a huge variety of use cases. I'm not going to call it a pump and dump scam because I think that a lot of these people truly think that it is going to 500k and beyond and that they will never need to dump it all.
    • tluyben2 6y ago
      WU is very expensive though; btc, if you know what you are doing, does not come close. WU is a horrible but unavoidable evil for millions of workers worldwide. This is one of the cases that should be disrupted.
• ur-whale 6y ago
  Bitcoin has demonstrated the existence of a deep, pent-up need for a financial instrument that: - can preserves value over the long term (implemented in this case via demonstrably finite supply) - isn't easily manipulated by governments trying to finance their mismanagement of public money In this by itself, it is already not a disaster.
  • colinmhayes 6y ago
    Fiat currency is one the most beneficial economic developments ever. Goldbuggery is idiotic.
    • ur-whale 6y ago
      >Fiat currency is one the most beneficial economic developments ever. Currency certainly is. Fiat most certainly not [1] [1] https://ginifoundation.org/kb/fiat-currency-graveyard-a-history-of-monetary-folly/ https://ginifoundation.org/kb/fiat-currency-graveyard-a-hist... >Goldbuggery is idiotic. Whenever something is being thought of as useful by a sizable portion of the population over large swaths of time, calling it idiotic is pretty much guaranteed to be a boomerang.
      • colinmhayes 6y ago
        https://www.youtube.com/watch?v=iKYKLgzyF9o https://www.youtube.com/watch?v=iKYKLgzyF9o this is what you uneducated goldbugs sound like
        • ur-whale 6y ago
          First you're assuming I'm a gold bug : I'm not. Second, the person who looks like an absolute ass in this video is not who you think. Third, there are a lot more house sessions where Ron Paul is giving various heads of the fed, including Bernanke, a healthy dose of reality check. They're all really worth watching, thaanks for pointing them out. Finally: the only point I was trying to make is that fiat currency have been systematically used throughout history by governments to milk their citizenry without them noticing. The USD and the feds are following a pattern that has existed since the Romans[1]: debasing currency to hide their incompetence at managing budgets. The actual implementation vary through history, becoming increasingly sophisticated with time: the Romans slowly decreased the amount of silver in their coins hoping no one would notice. The USG uses quantitative easing, which is much less noticeable by John Does in the street. [1] http://numismatics.org/rome-a-thousand-years-of-monetary-history/ http://numismatics.org/rome-a-thousand-years-of-monetary-his...
• leoplct 6y ago
  BTC is incredibly overvalued. if you value Bitcoin as much as the cost of the labor it takes to create one, then it should be worth a lot less.
  • sixQuarks 6y ago
    Bitcoin is valued at precisely what the market believes it’s valued at. If you believe it’s incredibly overvalued, then you should short it.
    • mysteryr 6y ago
      I believe this is a winning comment
  • dwaltrip 6y ago
    The labor theory of value doesn't seem to match how people actually assign valuations or make transactions. The cost of labor (and other inputs) obviously affects prices, but there are many other factors. The main one being if anyone is interested in actually paying the amount in question. It doesn't matter how much labor it took to make something if no one wants it. On the other hand, if others can't produce a comparable product and there is significant demand, then the price may easily be much higher than the cost of the inputs.
• neiman 6y ago
  Disaster , disaster, but if not for Bitcoin (or cryptocurrencies in general) I wouldn't have any option for paying online.
• oxymoran 6y ago
  Unless it’s a long term hedge for a new global reserve currency. Then this is exactly what you would want. And anonymity is never going to be a feature for financial transactions, that’s just kinda naive TBH.
• natewill 6y ago
  Stablecoins on Ethereum are much better at P2P transactions than Bitcoin, but Bitcoin is great as a store of value.
• rglover 6y ago
  Maybe Bitcoin is a disaster from the perspective of solving all of these problems, but alt-coins have solved a lot of them. The idea of Bitcoin as a digital gold has always made the most sense to me. While the initial goal may have been to use it as a literal form of digital cash, what it's evolved into isn't exactly a failure imo. It seems that instead of wiping the slate clean, it'd be better to more actively promote Bitcoin as just that, gold, not cash. Then, on the technical side, focus on making the conversion of that "gold" to a more cash-like cryptocurrency as easy as possible. I'm not terrible well-versed on the technical side of Bitcoin (just a high-level understanding), but this post seems kind of fatalist. Bitcoin is a success purely on the basis that over a decade later, after countless claims on its death, it's still chugging along. That resiliency deserves credit.
• yunesj 6y ago
  Bitcoin's value prop isn't in its anonymity. Early adopters weren't enthusiastic about bitcoin because they hoped it would end fractional reserve banking or any other financial product. Rather, it was incredible to see the entire financial industry quickly rebuilt on top of sound money. I agree that small transactions and mining can be (and are being) improved, but not for the same reasons. It's silly to blame bitcoin for government corruption and people taking advantage of government subsidies. Bitcoin is simply doing what was always done more efficiently. I would expect that an individual like Bear would be more in tune with what bitcoin was trying to accomplish.
  • jpmattia 6y ago
    > Early adopters weren't enthusiastic about bitcoin because they hoped it would end fractional reserve banking Just to amplify your point: There is a weird idea that that monetary multiplication (like fractional-reserve banking) is not possible with bitcoin. However, anytime someone lends bitcoin or shorts it on an exchange, they increase the bitcoin in circulation past the base count of 21 million btc (or however many have been minted at the time). The idea that bitcoin would somehow escape fractional-reserve banking was only held by people who do not understand the difference between M0 and M1/M2 in elementary macroeconomics.
    • marcell 6y ago
      There is a subtle distinction though. When a bank lends out US dollars, they are effectively creating new money that is treated as “real” money. They don’t technically lend out the deposits. In contrast, crypto lenders can’t create new bitcoin. They need deposits to lend out. The depositer in turn is aware they don’t hold real bitcoin, just a deposit credit at the lender. This is the origin of the crypto mantra “Not your keys, not your crypto.” It’s true that the “M1” value can increase, but unlike fiat money the distinction is (for now) visible to the user.
      • jpmattia 6y ago
        > When a bank lends out US dollars, they are effectively creating new money that is treated as “real” money. They don’t technically lend out the deposits. This is exactly wrong. In fact, it is the origin of the term "fractional reserve": They are reserving a fraction of the deposits and lending out the rest.
• deleted 6y ago
  [deleted]
• bconnorwhite 6y ago
  Most of the criticisms in this thread seem to be missing that Bitcoin is only layer 1. Bitcoin isn't Visa or cash - its gold. Rather than shipping gold across the Atlantic, large institutions will settle in a few minutes in Bitcoin. L2/L3/L4 solutions (built into Apple Pay, etc.) will allow for instant payments for coffee, allow for privacy similar to physical cash, etc. Before this is possible, the price has to stabilize. Just takes time to go from $0.1 to $10M per coin. Once Bitcoin has eaten all the "store of value" value & only appreciates at the rate new wealth is created, L2/L3/L4 solutions will go mainstream.
  • Kaze404 6y ago
    It's been 12 years.
    • ZguideZ 6y ago
      12 years is nothing.
    • deleted 6y ago
      [deleted]
    • bconnorwhite 6y ago
      I can't tell if you're agreeing by saying "its only been 12 years," or if you're disappointed by a 10 million % appreciation in 12 years
  • NicoJuicy 6y ago
    Bitcoin ain't sold. Gold had it's value being tradeable offline.
    • bconnorwhite 6y ago
      Price action would seem to agree with your typo
      • NicoJuicy 6y ago
• knorker 6y ago
  Yup. I mean thank you, Captain Obvious. Are you surprised that people are inventing the institutions that people have already invented? I really, REALLY don't understand how cryptocurrency people think these institutions were created in the first place. It's as if they think they were invented by accident the first time, and if they just restart it from scratch then they won't get invented again. No... they were invented on purpose. How do you not understand that?
• vmception 6y ago
  *and here is what you can do to help it improve:
• deleted 6y ago
  [deleted]
• DethNinja 6y ago
  Bitcoin is a disaster alright but a disaster for the fiat system and for the parasites who need the fiat system to survive. Funny thing is bitcoin is only a small technology that will hurt the fiat system, there are more such disruptive technologies on the way but governments are far too stupid to see the writing on the wall.
  • rebelos 6y ago
    > Funny thing is bitcoin is only a small technology that will hurt the fiat system, there are more such disruptive technologies on the way but governments are far too stupid to see the writing on the wall. Examples?
    • everfree 6y ago
      I'm not the person you're responding to, but smart contracts will be disruptive to the finance industry. Why settle a contract in court when a computer can make a free, automatic, final deliberation based on software rules that both parties agreed to?
      • frankydp 6y ago
        Because you only end up in court when the humans that agreed to the contract no longer agree on the contract.
        • everfree 6y ago
          In theory you only end up in court if parties don't agree on the intent of the contract, not when they just change their mind about the contract. If one party no longer likes what they agreed to, yet the contract is clear and unambiguous, then a demand letter and/or a settlement often keeps the issue out of court.
• FabHK 6y ago
  A comment a few messages down thread that I wholeheartedly agree with: "It never fails to amuse me how so many cryptocurrency enthusiasts imagine they have deep new economic insights when they are just reinventing the past, badly."
• ZguideZ 6y ago
  I commented something similar to this below - the true value of Bitcoin is that it was put on autopilot and took off - in the meantime, there is no record of who the creator of it is - except a persona called Satoshi Nakamoto. It has been adopted widely enough that it cannot be shut down. It is decentralized, extra-governmental, and you can't sue or indict the founder or a centralized organization. Yes, bitcoin is code. Yes it is being used for the same purposes as fiat and banking. Yes it could certainly still use lots of adaptation. The simple matter that most people don't understand (yet) however is that Bitcoin is Anarchy.
  • leadingthenet 6y ago
    Is it really "Anarchy" if it's essentially controlled by small a clique of miners with specialized hardware that most people don't have / can't realistically have access to?
    • ZguideZ 6y ago
      To the system as it exists? Absolutely.
      • ZguideZ 6y ago
        The misunderstanding about anarchy is that no one really knows what will come out of it.
      • leadingthenet 6y ago
        How? What I've described is closer to an oligarchy than it is to anarchy. So either you disagree with my initial description, or you disagree that that description matches something other than anarchy. Either way, I think you'll find either one of those a difficult argument to make.
        • ZguideZ 6y ago
          Only if you presuppose that the 'small clique of miners with specialized hardware' represents the same interests as the system that bitcoin is slowly starting to displace. Perhaps I should have specified anarchy to the system as it currently exists. It's a time bomb built and released to destroy the economic status quo.
• kordlessagain 6y ago
  Written by a guy who holds a patent for for identifying the context of a statement made to a virtual robot.
• hedora 6y ago
  I wish the crypto currency described in the second half of Applied Cryptography had caught on. Basically, the bank issues a signed secret coin, and you (recursively) spend the money by using the secret to generate another signed secret. As with onion routing, you can only “look back” one step of the signature chain unless you collude. It’s anonymous and supports offline spending. Anonymity can be broken via collusion by an unbroken chain of downstream recipients of the money, but that’s a necessary feature to catch double spenders. It also integrates in well with modern day to day transactions, in that “atm”’s can issue and retire currency at will. There is not blockchain, so it trivially scales linearly, and is not energy intensive. It could be a reserve currency, but it’s not optimized for that. Instead, think of it as allowing any bank to issue its own digital fiat currency. In short, it solves most of the problems everyday people wish bitcoin solved, but isn’t very interesting to speculators.
  • thewarrior 6y ago
    How does this scheme support offline spending and also prevent double spending ?
    • hedora 6y ago
      When you double spend, someone eventually cashes the money in at a bank, and the bank notices. With their authorization, their wallet decrypts and divulges the person that gave them the double spent currency to the authorities. This continues recursively until the double spender is discovered. One problem with this scheme is that you could lose your wallet, then be found to be complicit in double spending years later (when you refuse to / can’t divulge the identity of the upstream spender).
• jqpabc123 6y ago
  Bitcoin is crypto version 1.0. Don't ever buy version 1.0 unless you want to be a beta tester.
• aazaa 6y ago
  For those who don't know, Ray Dillinger is one of the first people to review the Bitcoin source. He collaborated with Satoshi prior to the first release: > In November of 2008, I did a code review and security audit for the block chain portion of the Bitcoin source code. The late Hal Finney did code review and audit for the scripting language, and we both looked at the accounting code. Satoshi Nakamoto, the pseudonymous architect and author of the code, alternated between answering questions and asking them. https://www.linkedin.com/pulse/id-known-what-we-were-starting-ray-dillinger/ https://www.linkedin.com/pulse/id-known-what-we-were-startin... To pick the first point of his critique: > The pseudonymity of coins being owned by the bearer of some cryptographic key is a failure; People have been eavesdropping and aggressively analyzing the block chain from day 1. And the block chain will always be there, it will always be public, and it will always be subject to further analysis. And we are learning that analysis of that record is sufficient to destroy any pretense of anonymity or pseudonymity. The public nature of the Bitcoin block chain, and its privacy implications, were discussed in the white paper and have been known since the beginning. So it's odd to be labeling Bitcoin a failure now, given that nothing new has developed within Bitcoin itself on that front. What has happened since 2009 is that exchanges have fallen under the influence of the US government and its perpetual wars on terror and drugs. The on/off ramps are where most of the privacy loss is happening. Bitcoin users do the rest to themselves by lax opsec, including address reuse and address publication. The rest of the points are not that clearly laid out. To take the very next one: > The scarcity of block chain space has led people to re-invent every last feature of the banks they thought they were going to be escaping. Including debt brokering (lightning network) ... The lightning network isn't debt brokering because no debt is involved. It's a consensus-enforced contract over bearer instruments. The critique on mining centralization has been around for many years now, and Dillenger's analysis doesn't bring anything new to the table.
• OOPMan 6y ago
  People here talking about Venezuela seem to be ignoring the fact that maybe if that country wasn't such a disaster politically bottom-of-barrel solutions like Bitcoin wouldn't be needed. If the best excuse for Bitcoin is that it's the only thing that works when a governed society has broken down almost completely then maybe it's better to think about how we can avoid that kind of breakdown than it is to invest energy into trash like cryptocurrency.
  • dleslie 6y ago
    > the best excuse for Bitcoin is that it's the only thing that works when a governed society has broken down almost completely It's no coincidence that the loudest voices supporting Bitcoin are very often stubbornly zealous libertarians. The total collapse of functioning Government is kind of a libertarian folk dream. They want the proverbial barrel to be empty, and to have basic services paid for through user fees alone.
    • deleted 6y ago
      [deleted]
    • rockstardev 6y ago
      Looking back on the last year - didn't this already happened without Bitcoin?
  • rockstardev 6y ago
    Sir, US nationals without ownership of assets like real-estate and stocks got robbed to the tune of at least 20% through this year's inflation and money printing. What do you mean "if Venezuela wasn't political disaster Bitcoin wouldn't be needed"?
  • protoman3000 6y ago
    > maybe it's better to think about how we can avoid that kind of breakdown Yes, how about unite and peace instead of divide and conquer?
  • Siira 6y ago
• f430 6y ago
  The weakest link of any non-fiat currency is that the point of transforming fiat to cryptocurrency becomes. This makes it almost impossible for it to achieve its manifesto of being an alternative. Many in the industry conveniently overlook over the fact that the government can just ban you from wiring money to anyone selling cryptocurrency on a whim. It is my theory that cryptocurrency is being actively allowed because of its political, counter-intelligence value. Imagine if you invited all the bad people in your country and tricked them into using a currency they all believed to be infallable and anonymous. You simply ignore the middle level dealers or criminals and able to keep track of potential state level actors utilizing criminal networks to subvert your country.
• DennisP 6y ago
  > ultimately a "scalable" cryptocurrency would be doing things exactly the same way as a credit card processor That seems to be true of Bitcoin, but several others are working hard on scaling. The one I'm most familiar with is Ethereum, where: - Zkrollups store transactions on-chain in a highly compressed format without loss of security. For simple value transfers, a zkrollup system in production now can handle up to 9000 per second, if the network isn't doing anything else. - Data sharding, coming in about a year, multiplies that by 64X initially. Rollups have minimal reliance on computation on chain, so just scaling the data is enough. - Replacing merkle trees with more efficient data witnesses like polynomial commitments could multiply data capacity by another factor of ten. = All of this is subject to quadratic scaling. As individual nodes get more powerful, it multiplies both the capacity of individual shards and the number of shards. Of course several chains are doing away with mining, and several others have fixed the anonymity issue.
• rockstardev 6y ago
  Have fun staying poor
• opendomain 6y ago
  My problem with bitcoin is the fees just to use it. Coinbase charges 4% plus a fee to exchange to another crypto currency, plus 1% for the buy/sell spread and then even more fees to put the money back in my bank. Western Union is much more competitive and is actually used.
• deleted 6y ago
  [deleted]
• mumblemumble 6y ago
  The situation reminds me a bit of Robert Nozick's Anarchy, State, and Utopia. It's a great bit of political philosophy where he argues pretty convincingly that an anarchist society cannot exist for any appreciable length of time. Because the arrangement is fundamentally unstable, and will inevitably be replaced by certain minimal set of social mechanisms in response to some basic social forces. Those mechanisms are, collectively, things that we recognize as basic features of government, such as police and taxation. Bitcoin strikes me as an experiment to see if the same kind of thing happens in economics. It would seem that it does.
  • agumonkey 6y ago
    Nozick may be accessible through web.archive.org https://duckduckgo.com/?q=Anarchy%2C+State%2C+and+Utopia+archive.org&t=ffab&ia=web https://duckduckgo.com/?q=Anarchy%2C+State%2C+and+Utopia+arc...
• SnowProblem 6y ago
  Interesting reading Deryk Makgill's response: https://www.metzdowd.com/pipermail/cryptography/2020-December/036512.html https://www.metzdowd.com/pipermail/cryptography/2020-Decembe... and then Ray's response back: https://twitter.com/wakgill/status/1344760972116942850 https://twitter.com/wakgill/status/1344760972116942850
• dsterry 6y ago
  Yep, such a disaster it's died a thousand times.
• dsterry 6y ago
  Yup, such a disaster it's died a thousand times.
• ur-whale 6y ago
  >Bitcoin is a disaster Clearly. [1] [1] https://www.bitstamp.net/markets/btc/usd/ https://www.bitstamp.net/markets/btc/usd/
• KuDeTa 6y ago
  This is unduly pessimistic overly sentimental. Bitcoin is anything but a failure, and represents an enormous step forward in the creation of digital currency. It's been a incredibly successful experiment regardless of it's long term future and Blockchain will most certainly be around forever. Scaling to much larger on chain transactions is of course the holy grail, but this is far from unsolvable and if bitcoin doesn't do it another crypto will.
• kmeisthax 6y ago
  We know. Hell, Bitcoin Core developers have known for years, that's why they never endorsed a base block increase. That's why they've put all their energy into adding upper layers with transactions secured by flimsy game theory rather than flimsy hashcash. That's why they pushed for SegWit, purely because it would make the complicated transactions necessary to run those upper layers not more expensive than direct transfers. That's why they added a bunch of ways to tack on fees to unconfirmed transactions, and talked a bunch about a "fee market" (even though that's not how Bitcoin transactions work) because it was obvious someone had to pay for all this stolen electricity. I'd also argue that Bitcoin hasn't just failed to meet it's goals, but that it's goals aren't something the average person should want. The explicit goal of Bitcoin was untraceable payments you can't cancel. In practice this means fraudulent payments cannot be reversed, and stealing Bitcoin is so cheap and easy to do we've literally caught Ruby packages designed to slip into developers' computers and steal Bitcoin. Cryptominers have also plagued the web to the point where browser vendors have to actively restrict what you can do in JavaScript. (I'd also ALSO argue that anonymous payments are bad for society, and that financial privacy shouldn't be a thing.)
  • cyphertruck 6y ago
    The SegWit project quadrupled the max block size in 2016. Since then there’s never been significant backlogs. Even with record high prices, one hour transactions are less than a dollar. Maybe even a $0.10 fee will clear in that time. I don’t know why this claim it never happened persists, except certain people who wanted to tule over bitcoin have spent millions employing an army if bots to spread the lie.
    • zhoujianfu 6y ago
      If a transaction will clear in less than an hour for less than a dollar (or even ten cents), why is the average fee currently $9.10?
      • ric2b 6y ago
        Because lots of businesses don't care that much when they're moving much higher amounts, so they use really basic/dumb algorithms to choose their fees.
• anonytrary 6y ago
  Good points. Centralized mining and existing wealth inequality really don't allow us to escape the fundamental problems with big banks. BTC is an emergent bank where the first and wealthiest movers who own the most mining real estate act as the new big banks. It seems that, asymptotically, bitcoin will just end up suffering from the very things it meant to fix. The whole idea behind proof-of-work was rooted in "one cpu, one vote", but we clearly see that this does not imply "one person one vote". Proof-of-stake suffers from centralization as well, albeit being a green solution. Proof-of-I-am-a-unique-human does not exist yet and is an unsolved problem in the intersection between biology, physics, and engineering. Neuralink comes to mind as the closest existing thing that might be relevant here, but it's not even close. Until you can really guarantee that a single human can only represent a single vote, blockchain doesn't seem viable as a "fix for banks", it's just a reincarnation. Even then, nothing stops people from coming together and forming vote schemes.
• worik 6y ago
  Took this long to realise?
• muzika 6y ago
  This year, more so than before, bitcoin is being used as a store of value - “digital gold”. There are other crypto coins that can be used for making transactions. People are buying bitcoin to hold it long term, not to send it to other people on the most part.
• WhoCaresLies 6y ago
  when emotions speak, you loose credibility people mad at bitcoin are the jealous people who didn't buy when it was only just $30 it's fine, you missed an opportunity NOW, what's bad about bitcoin is just what's bad about our society You can make money from nothing, you don't even need to work, we reward the wrong people with a better life While the normies have to break their back at work to make sure they can feed their kids and pay the bills, that's stressful 2021, hopefully the year of the big collapse, and a healthly reset
• sacrelege 6y ago
  the posted thread is rather interesting and I would love to see more critical discussions like this on the issues of bitcoin. unlike the often seen circle jerk of bitcoin maxis, this could actually lead to solutions or issues getting addressed before they become bigger.
• biolurker1 6y ago
  Monero and Ethereum are not disasters according to these arguments unless OP is a hater in general
• neop1x 6y ago
  Bitcoin all-time-high, has someone missed the boat? Bitcoin is bad, that's why there are thousands of alternative crypto coins. For me, Bitcoin is a commodity, digital gold. It's fast and easy to move across country borders, it's quicker than international wire transfers. And because nothing is 100% perfect in the world, Bitcoin is not perfect, either.
• nahuel0x 6y ago
  Maybe future historians will grab his heads when they find out we consumed the energy of a mid sized country during a climate change global existential threat just to run a big speculation digital game. In some sense, bitcoin seems to be the epitome of human irrationality.
• cheaprentalyeti 6y ago
  Orange Money Bad!
• cannabis_sam 6y ago
  You could write the same critique of banks and the postal service, except that those institutions are far more brittle and failure prone, unless propped up by the justice system. Bitcoin is far, far from perfect, but to claim it’s a failure is at best myopic and most reasonably just dumb ignorance.
• deevolution 6y ago
  Sounds like alot of complaining. If it's so terrible, don't use it or build something better! Bitcoin is completely optional. Thanks for sharing your opinion I guess?
• KuDeTa 6y ago
  Best performing asset of the decade.